Construction Loan Calculator
Calculate payments and costs for your construction loan, including draw schedules
Understanding Construction Loans
What is a Construction Loan?
A construction loan is a short-term loan used to finance the building of a home or other real estate project. Unlike traditional mortgages, construction loans are typically paid out in stages (draws) as construction milestones are completed, and often feature interest-only payments during the construction period.
How Construction Loans Work
- Funds are disbursed in stages called "draws"
- Interest is only paid on disbursed amounts
- Regular inspections track construction progress
- Converts to permanent financing upon completion
- Typically higher interest rates than traditional mortgages
Types of Construction Loans
- Construction-to-Permanent Loans
- Construction-Only Loans
- Owner-Builder Construction Loans
- Renovation Construction Loans
- Commercial Construction Loans
Key Considerations
- Higher down payment requirements (20-30%)
- Detailed project plans and specifications needed
- Contractor approval may be required
- Construction timeline management
- Cost overrun contingency planning